Market evolution: Small diesel cars (CN 87033110) — 2015–2025
Introduction
This report examines the EU's external trade in new small diesel cars with engine displacement of 1,500 cm³ or less (CN 87033110) over the 2015–2025 period. The decade under review has witnessed a profound structural transformation of this market segment. Faced with tightening emission regulations, shifting consumer preferences, and the United Kingdom's departure from the EU customs territory, the small diesel car segment has contracted sharply in both production and trade. The EU has transitioned from a position of near balance in 2015 to becoming a significant net exporter by 2025, even as absolute trade volumes have declined dramatically across the board. The following sections unpack the key dynamics behind this transformation.
1. A Market in Structural Contraction
Total trade volumes have collapsed across both flows
The most striking feature of the 2015–2025 period is the sheer magnitude of decline in EU trade for small diesel cars. Both imports and exports contracted substantially, but imports suffered a far steeper fall.
| Flow | Metric | 2015 (first) | 2025 (last) | Change |
|---|---|---|---|---|
| Imports | Value (EUR) | €4,553 million | €546 million | −88.0% |
| Imports | Units (p/st) | 432,186 | 47,726 | −89.0% |
| Exports | Value (EUR) | €4,303 million | €2,402 million | −44.2% |
| Exports | Units (p/st) | 330,760 | 168,271 | −49.1% |
Imports fell by nearly 90% in both value and unit terms, while exports roughly halved. The minimum import values were recorded in recent years (€426 million in value and 32,689 units in volume), confirming that the decline is not cyclical but structural.
EU domestic production has halved
The contraction is not limited to trade. EU production of small diesel cars fell from 1,332,104 units (worth €13.6 billion) in 2015 to an estimated 600,000 units (€8.4 billion) in 2025 — a decline of 55% in volume and 38% in value. The production trough was reached at 550,000 units, indicating that the recent figure represents a partial stabilisation rather than a recovery.
Unit prices have risen modestly, suggesting model mix shifts
Despite falling volumes, export unit prices rose from €13,009 to €14,275 per vehicle (+9.7%), and import unit prices increased from €10,534 to €11,437 (+8.6%). This suggests that the remaining trade is concentrated in higher-value models, while cheaper, high-volume entries have exited the segment. The fact that mass-based prices tell a slightly different story (export price per tonne actually fell 6.3%, from €10,012 to €9,377) points to a shift toward heavier but not proportionally more expensive vehicles — consistent with larger diesel models surviving in the remaining product mix.
2. Brexit and the Collapse of the United Kingdom Trade Corridor
The UK was the EU's dominant partner for small diesel car trade in 2015
In 2015, the United Kingdom was by far the largest partner on both sides of the ledger. It absorbed €2,422 million in EU exports (56% of total EU exports to non-EU countries) and supplied €1,730 million in imports (38% of total EU imports from non-EU countries). The bilateral flow was deeply integrated, reflecting the UK's role as both a major production site and consumer market within the EU single market.
Post-Brexit, UK trade has effectively disappeared from EU extra-EU statistics
By 2025, EU exports to the UK had fallen to €120 million (−95.1%) and imports from the UK to just €17.5 million (−99.0%). This near-total collapse occurred as the UK became a "third country" for customs purposes after the end of the transition period in January 2021. While some of this trade may have continued under new arrangements, the statistical reclassification of the UK from intra-EU to extra-EU — combined with new tariff and regulatory barriers — explains the dramatic figures. The volatility coefficient for the UK import corridor (0.98) and export corridor (0.77) reflects this structural break.
The UK exit accounts for the majority of the observed decline
A back-of-the-envelope calculation illustrates the point: the total drop in EU export value was €1,901 million, of which €2,303 million came from the UK alone. In other words, EU exports to the rest of the world (excluding the UK) actually increased over the period, even as headline totals declined. The same logic applies to imports: of the €4,007 million import decline, €1,713 million was attributable to the UK. While other partners also saw sharp falls (Morocco, Serbia, India), the UK accounts for the single largest share of the overall contraction.
3. From Net Importer to Net Exporter — A Reversal of Trade Orientation
The EU has become a consistent net exporter of small diesel cars
In 2015, the EU ran a small trade deficit of €250 million in this product. By 2025, the balance had swung to a surplus of €1,856 million — a shift of over 843%. The turning point came around 2020–2021, and since then the surplus has widened steadily, reaching a peak of approximately €2,209 million.
Net import reliance — measured as (imports − exports) / (imports + exports) — moved from +1.1% in 2015 to −35.1% in 2025, confirming that the EU is now structurally self-sufficient and a net seller to the rest of the world in this segment.
Export propensity has surged while trade intensity has shifted
The EU's export propensity (exports as a share of production) jumped from 4.4% to 31.1% (+602%), meaning that nearly one-third of EU-produced small diesel cars are now destined for non-EU markets. Trade intensity (the share of trade in total apparent consumption) rose from 9.4% to 34.4%.
This shift reflects a dual dynamic: domestic demand for small diesel cars has collapsed within the EU (due to dieselgate, emission regulations, and electrification policies), while production capacity — particularly in Southern and Eastern Europe — has pivoted toward exports to non-EU markets where diesel retains stronger demand.
Partner concentration has intensified, especially on the import side
The Herfindahl-Hirschman Index (HHI) for import concentration surged from 2,583 to 8,940 (+246%), moving well above the 2,500 threshold that typically signals moderate concentration. By 2025, Türkiye alone accounts for 93.9% of remaining EU imports in this segment (€512 million out of €546 million), reflecting the collapse of other supply sources (Morocco, Serbia, India, Japan, South Korea) that had previously diversified the import base.
On the export side, concentration also rose but more moderately (HHI from 3,723 to 4,305, +15.6%). The key shift has been Spain's emergence as the leading EU exporter (€1,262 million in 2025, +38.6% from 2015), overtaking Germany whose exports collapsed from €1,944 million to €265 million (−86.4%). Türkiye has become the top export destination (€1,517 million, +60.8%), and Morocco has grown significantly (€382 million, +93.0%).
The specialisation data for 2025 confirms the geographic reorientation: Portugal (RSCA 0.78), Spain (0.52), and France (0.49) display the strongest comparative advantage in this product, while Northern and Central European member states (Denmark, Finland, Austria, Netherlands) have essentially exited the segment.
Conclusion
The EU market for small new diesel cars (CN 87033110) has undergone a fundamental structural decline over the 2015–2025 decade. Production has halved, and trade volumes have fallen sharply — particularly imports, which declined by nearly 90%. The single most impactful event was the United Kingdom's exit from the EU customs territory, which removed the largest bilateral trade corridor and accounts for the majority of the observed contraction in both import and export flows. Beyond Brexit, the broader retreat from diesel — driven by regulatory tightening, the "dieselgate" fallout, and accelerating electrification — has permanently reduced the relevance of this product category.
Paradoxically, the EU has emerged from this contraction as a far more export-oriented producer. The trade balance has swung from a modest deficit to a surplus of nearly €1.9 billion, and export propensity has risen from 4% to 31% of production. This reflects the relocation of production to cost-competitive EU member states (notably Spain, Romania, and France) and the redirection of output toward non-EU markets — principally Türkiye, Morocco, and Ukraine — where demand for affordable small diesel vehicles persists. However, the increasing concentration of imports on a single supplier (Türkiye) and the narrowing of the export partner base represent growing vulnerability risks for the EU in an otherwise declining segment.